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Getting Started

Existing Plays, Saturday, 09/15/2007

In Play Updates and Reviews

by OI Staff

HAVING TROUBLE PRINTING?

XLE $72.50 +2.24 - Energy Spyder *** Stopped $72 ***

The XLE Put play was stopped on Wednesday at $72. I wanted to stay in but in
hindsight it was the right move. We never know what the future holds and when a
play goes against us we need to exercise the discipline to exit.

No news on UPL but gas prices and stock prices rose last week on news that CHK
and STR were curtailing production until prices improved. There is no reason to
sell gas for low prices simply because there is no place to store it. The major
producers are cutting back to give the storage facilities time to deplete some
storage and keep prices level.

Ultra returned to the top of their recent range and well above our stop.

Prior comments:

They have identified three more producing zones at their Pinedale field that
could substantially increase production. They also expect to receive some
further downsizing on well placement allowing them to drill 2-4 times as many
wells. They also expect to receive permission from the State of Wyoming to drill
during the winter months effectively giving them an extra quarter or more of
production per year. Now, we just need winter to show with some teeth this year
and deplete the 3 tcf
of gas currently in storage.

CHK continues to improve on news of their upcoming $1 billion limited
partnership sale covering some natural gas assets. CHK also plans to sell $2
billion in other assets and reiterated its strong hedging program of 80% of
production for the next two years in the $6-$8 range. S&P reaffirmed their
credit rating a BB.

Hercules finally found some traction and moved to a new 4-week high. Not quite a
breakout yet but at least the turn was positive. News that the CEO was buying
shares in the open market provided some of the lift. Maintain the stop at $24.

BHP continues to be a strong performer and hit a new two-month high on Thursday.
No specific news but BHP is mentioned positively in some article nearly every
day.

Breakdown target: $55 hit 8/15/07

Position: 2010 $70 LEAP Call LPH-AN @ $9.00

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NOV - $133.58 +3.72 National Oilwell ** Stopped 127.00 **

NOV hit our trailing stop on Monday and took us out for nearly a $20 profit on
the option. No complaints here and we will get back in after the 2:1 split on
the 28th.

2:1 split date: Sept 28th.

Breakdown target: $100 hit 8/16/07

Position: FEB $110 Calls NOV-BB @ $9.70 exit 9/10 $28, +18.30

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CCJ - $44.68 +4.11 Cameco ** Stop Loss $30 **

CCJ exploded on the news of its buyback and a deal to acquire an interest in Cue
Capital Corp, a Paraguay explorer. CCJ also gained the right to acquire a 60%
interest to develop uranium discoveries in Paraguay. CCJ also owns 53% of
CenterraGold and with gold prices at multiyear highs does not hurt that value
either. CCJ said last week it was going to buy back 5% of its outstanding shares
or 17.7 million shares.

No slowdown on RIMM and another new high on Thursday. RIMM will release a new
version of the Pearl in mid October. The new version is said to be more consumer
friendly and contain some iPhone type features. It is being marketed to the
older more business oriented person that still would like some better browsing
features. RBC Capital Markets called RIMM a top pick on Friday with a price
target of $110.

That was close. I was beginning to worry that BSC would be too close to the stop
on earnings day and take us out on a volatility dip. Now $20 above the stop we
should be in good shape but it would really help if they surprise to the upside
or at least don't screw up to bad.

Earnings are Sept-13th.

Breakdown target $100 hit 8/06/07

Position: 2010 $120 LEAP Call YBO-AD @ $25.60

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CFC - $19.42 +1.21 Countrywide Financial ** Stop Loss $15 **

A gain on Countrywide! What is the world coming to? Next thing you know oil will
be over $80. The bounce came on the news that CFC had arranged another $12
billion in financing and had funded $34 billion in loans in August. That was
-17% below August 2006 but way above what anyone expected to be done. They also
reported $62 billion in the pipeline. I would bet the bottom is now behind us.